Interim SEC President Drops Attempt to Include Crypto Platforms in Expanded Exchange Regulation
Interim SEC (Securities and Exchange Commission) President Mark Uyeda is set to make significant changes to a long-awaited rule aimed at expanding the definition of “exchanges” required to register with the agency. In a departure from former President Gary Gensler’s ambitions to include crypto platforms in this regulation, Uyeda has asked his team to remove this controversial section.
A Departure from Gary Gensler’s Approach
The initial proposal, conceived during the Gensler administration, sought to impose similar obligations on crypto trading platforms as those on traditional markets, including the communication protocols used by these actors. This approach drew widespread criticism, particularly from the DeFi industry, which saw it as an attempt to excessively broaden the SEC’s authority over decentralized protocols. In response to this massive pushback, Uyeda stated during a speech at the Institute of International Bankers in Washington:
I believe that linking the regulation of the Treasury bond market to an excessive attempt to control the crypto market was a mistake.
A More Lenient Approach under the Trump Era
This change in direction comes as the Trump administration appointed new leadership at the SEC, marking a clear break from Gensler’s approach, often seen as aggressive towards the crypto market. This shift could signify a more pragmatic regulation, avoiding the need to force decentralized protocols and crypto platforms to conform to rules originally designed for traditional financial markets.
What Does this Mean for the Crypto Industry?
The removal of this provision could provide some relief to crypto platforms that feared stringent oversight. However, this decision does not spell the end of sector regulation. Other initiatives may emerge to regulate digital markets, potentially through more targeted and tailored approaches to the specificities of digital assets.
